Correlation Between Autodesk and Clover Health

Can any of the company-specific risk be diversified away by investing in both Autodesk and Clover Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Autodesk and Clover Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Autodesk and Clover Health Investments,, you can compare the effects of market volatilities on Autodesk and Clover Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Autodesk with a short position of Clover Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autodesk and Clover Health.

Diversification Opportunities for Autodesk and Clover Health

0.26

Correlation Coefficient

Autodesk  Clover Health

Modest diversification

The 3 months correlation between Autodesk and Clover is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Autodesk and Clover Health Investments, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clover Health Invest and Autodesk is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Autodesk are associated (or correlated) with Clover Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clover Health Invest has no effect on the direction of Autodesk i.e., Autodesk and Clover Health go up and down completely randomly.

Pair Corralation between Autodesk and Clover Health

Assuming the 90 days trading horizon Autodesk is expected to under-perform the Clover Health. But the stock apears to be less risky and, when comparing its historical volatility, Autodesk is 1.97 times less risky than Clover Health. The stock trades about -0.13 of its potential returns per unit of risk. The Clover Health Investments, is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,100  in Clover Health Investments, on December 26, 2024 and sell it today you would earn a total of  104.00  from holding Clover Health Investments, or generate 4.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Autodesk  vs.  Clover Health Investments,

Autodesk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Autodesk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Clover Health Invest

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clover Health Investments, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Clover Health may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Autodesk and Clover Health

The main advantage of trading using opposite Autodesk and Clover Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autodesk position performs unexpectedly, Clover Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Clover Health will offset losses from the drop in Clover Health's long position.

The idea behind Autodesk and Clover Health Investments, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.